£10m takeover of Typhoo Tea agreed
Stretford consumer goods distributor, Supreme, has acquired the iconic Typhoo Tea brand in a £10.2m deal.
AIM-listed Supreme has shifted from being a purely vaping goods business to a white label soft drinks business as well as operating in the lighting, batteries and sports nutrition and wellness categories.
It indicated its interest in acquiring Bristol-based Typhoo out of administration last Thursday (November 28) and today (December 2) confirmed the takeover.
The deal includes Typhoo Tea’s stock and trade debtors with a book value of £7.5m and Supreme expects the integration of the business to proceed without disruption to existing operations or customer service levels.
Established in 1903, Typhoo Tea was the first pre-packaged tea brand in the UK and has since expanded its product offering from traditional black and decaffeinated black teas to now include white and lemon instant flavours, herbal and fruit tea infusions, and a selection of coffees across a portfolio of brands including the iconic Typhoo brand but also QT, Lift, and Heath and Heather.
Today, Typhoo Tea supplies all the major UK supermarkets and discounters as well as health food store, Holland and Barrett. Typhoo Tea also distributes products into both the Ministry of Defence and the NHS, alongside servicing international customers across North America, EMEA and Southeast Asia.
For the year ended September 30, 2024, Typhoo Tea generated unaudited revenue of approximately £20m and a loss before tax of approximately £4.6m.
Under Supreme’s ownership, it is anticipated that Typhoo Tea will operate on a capital light, outsourced manufacturing model, which the board believes can generate a gross profit margin of around 30%, with a much reduced overhead base. As with previous transactions, Supreme expects the acquisition to be adjusted earnings-enhancing.
Supreme said the acquisition will further accelerate its broader diversification strategy, bringing non-vape annualised sales to more than £120m (c. 50% of Group revenue).
It said the combination of Typhoo Tea’s product set, alongside Supreme’s Soft Drinks and Sports Nutrition and Wellness categories, will enable the group to further develop sales, marketing and product innovation opportunities, including additional sales across Supreme’s established customer footprint of supermarkets, discounters, wholesalers and online retailers, and development of additional own-label products or licences under well recognised brands, replicating Supreme’s long standing success in the Batteries and Lighting categories.
Sandy Chadha, Supreme chief executive, said: “The acquisition of Typhoo Tea marks a significant step in our broader diversification strategy and brings one of the most iconic UK consumer brands into the Supreme family.
“I believe Typhoo Tea will thrive under our ownership, further benefitting from Supreme’s significant market reach and successful track record in creating brand loyalty, making us an ideal fit for this business.”
He added: “Having established our Soft Drinks division earlier in the year, we believe the addition of Typhoo Tea and its highly complementary blend of great value and premium tea brands, creates tangible cross sell and product innovation opportunities in the near term, alongside avenues into credible UK retailers that Supreme has been looking to partner with.
“We look forward to welcoming Typhoo Tea into the Supreme family and updating shareholders on our progress over the course of the current financial year.”
Typhoo previously operated from a factory in Moreton, Wirral, but in July last year shut the plant down, with the loss of 85 jobs, and relocated to a new headquarters in Bristol.
This, inadvertently, played a part in its unfortunate demise, resulting in an illegal occupation of the abandoned factory, which suffered internal damage requiring repairs in the order of £24m before it could be divested, putting further strain on company finances.
